When calculating cash flow from operations (CFO) using the indirect method, which of the following is most accurate（）
A. The indirect method requires an additional schedule to reconcile net income to cash flow.
B. In using the indirect method, each item on the income statement is converted to its cash equivalent.
C. When recognizing a gain on the sale of fixed assets, the amount is a deduction to operating cash flows.
参考答案：C
解析：
When recognizing a gain on the sale of fixed assets, the amount is a deduction to operating cash flows. This is because the gain would be double counted in the investing section and in net income. Therefore, the gain must be removed from net income. The direct method of cash flow calculation converts the income statement items to their cash equivalents, not the indirect method. When calculating cash flow from operations, the current period depreciation (expense) amount should be used and not total accumulated depreciation. Also, depreciation is added to net income in order to calculate CFO using the indirect method.
